The stories on the Income Tax Appellate Tribunal ( ITAT ) that were published at Taxscan.in from February 3, 2024 to February 8, 2024 are analytically summarized in this Round-Up.
In a recent development, Boeing India Private Limited ( BIPL ) successfully resolved a tax dispute, with the Income Tax Appellate Tribunal ( ITAT ) cancelling a hefty INR 21,52,899 adjustment. The dispute revolved around BIPL’s operational status and its merger with Boeing Corporation India Ltd. ( BCIL ).
The ITAT bench, headed by Shamim Yahya and Challa Nagendra Prasad, agreed with BIPL’s arguments. They stressed that the disputed transaction was not with BIPL and that there was no involvement of the Transfer Pricing Officer ( TPO ) in BIPL’s case. The TPO’s order, forming the basis of the adjustment, pertained to BCIL, an entity that merged with BIPL on April 1, 2017. Consequently, the tribunal ruled that adjustments in BCIL’s case should not impact BIPL’s assessment.
The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has set aside the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961 when they were commenced beyond the statutory period of four years from the end of the relevant assessment year.
The two member bench of the tribunal comprising Annapurna Gupta ( Accountant member ) and Siddhartha Nautiyal (Judicial member ) concluded that the 147 of the Income Tax Act, 1961, proceedings are liable to be set-aside, in the result, the appeal of the revenue was dismissed.
The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the penalty under Section 271(1)(c) of the Income Tax Act, 1961, stating that merely agreeing to an addition based on the valuation made by the stamp valuation authority does not constitute conclusive proof that the sale consideration was incorrect.
The two member bench of the tribunal comprising Anupama Gupta ( Accountant member ) and Siddartha Nautiyal ( Judicial member ) reached a conclusion regarding the imposition of penalties under Section 271(1)(c) of the Income Tax Act, 1961, in the current case. Firstly, it is evident that at the time of the sale of the mentioned immovable property, the assessee had already fulfilled tax obligations amounting to Rs. 5,42,120/- on 26.12.2014 (inclusive of tax deducted at source under Section 194 IA of the Income Tax Act, 1961). Thus, there appears to be no intent to evade taxes on the short-term capital gain arising from the sale of the property.
The Ahamedabad bench of the Income Tax Appellate Tribunal ( ITAT ) allowed sale expenditure on packing material in jute bags that had been rendered unusable due to damage sustained during loading and unloading.
The two member bench of the tribunal comprising Anupama Gupta ( Judicial member ) and Siddartha Nautiyal ( Accountant member ) found that the Commissioner of Income Tax ( Appeals ) accurately determined in the ITO vs. M/s. J. K. Patel & Brothers for Assessment Years 2008-09 & 2009-10, that the entire expense of Rs. 1, 31,875/- was solely and exclusively for business purposes and was supported by evidence. Additionally, the bench believed that this expenditure pertained to packing materials in jute bags that had been damaged or torn during loading and unloading, rendering them unusable and therefore written off as an expense in the Profit & Loss Account. Consequently, we saw no reason to question the decision of the Commissioner of Income Tax ( Appeals ) and thus found no grounds for intervention.
The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the penalty under Section 271(1) (c) of the Income Tax Act, 1961, stating that the assessee should be aware that the Department has discovered escapement of income.
The single member bench of the tribunal comprising Anupama Gupta ( Accountant member ) held that the penalty levied under Section 271(1) (c) of the Income Tax Act, 1961, to the tune of Rs.1, 85,400/- to be unjustified and direct the deletion of the same.
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) observed that allotment of enquiry shares to subscribers was outside scope of Section 56(2) ( viib ) of the Income Tax Act, 1961
The two member bench of the tribunal comprising Yogesh Kumar ( Judicial member ) and Pradip Kumar Kediya s( Accountant member ) observed that when allotments are made to existing shareholders, the deeming provisions of Section 56(2)( viib ) of the Income Tax Act, 1961, would not typically apply .According to the valuation report, the Fair Market Value ( FMV ) has been determined at Rs. 14.815 per share, which aligns with the FMV at which shares were issued to the holding company.
The Ahmadabad bench of the Income Tax Appellate Tribunal ( ITAT ) rejected the deduction claimed under Section 35(1)(ii) of the Income Tax Act, 1961, citing that the trust was involved in issuing bogus bills for donations.
The single member bench of the tribunal comprising Sujithra Kamble ( Judicial member ) observed that it was evident from the statement provided by the Director of the School of Human Genetics and Population Health Institute that the institute engaged in issuing bills disguised as donations, with funds subsequently funneled back to donors through various channels in the guise of purchases.
The Pune bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter for consideration of the registration of the trust under Section 12AA of the Income Tax Act, 1961, due to the failure to confirm the authenticity of activities and compliance with relevant laws.
The two member bench of the tribunal comprising R.S. Syal ( Vice President ) and Partha Sarathi Choudhari ( Judicial member) overturned the decision of the CIT(E) and referred the matter back to their office with the aforementioned directive. The CIT (E) was instructed to re-adjudicate the matter in accordance with the law, adhering to the principles of natural justice. The grounds of appeal of the assessee were allowed for statistical purposes.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) directed the Assessing Officer to finalize the assessment order under Section 144C of the Income Tax Act, 1961 due to the delay in finalizing late objections.
The two member bench of the tribunal comprising C.N. Prasad ( Judicial member) and Dr. B.R.R Kumar ( Accountant member) observed that the assessee , through a letter dated April 11, 2022, informed the Assessing Officer that objections had been filed before the office of DRP-II on April 6, 2022, challenging the draft Assessment Order.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) observed that no response to notice under Section 133(6) of Income Tax Act, 1961 that doesn’t prove that entire transactions are bogus
The two member bench of the tribunal comprising Gadan Goyal ( Accountant member ) and Amit Shukla ( Judicial member ) observed the status of these companies and found that most of them are still active and compliant with statutory requirements, which undermines the claim that they were formed solely for accommodation entries. Even though some parties did not respond to notices under Section 133(6), of Income Tax Act, 1961, this does not prove that the entire transactions are fraudulent, especially when all other documents demonstrating the identity and creditworthiness of the parties have been provided and remain unexamined by the AO.
The Pune bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal, stating that a corporate entity cannot logically incur expenditure for individual property improvement.
The two member bench of the tribunal comprising SS Vishwanethra Ravi ( Judicial member ) Dipak P Ripoti ( Accountant member ) found that this declaration does not provide meaningful support to the assessee’s case. Furthermore, it was important to consider that Wings Travel Management India Private Limited was a corporate entity and cannot feasibly incur expenditure for an individual’s flat.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) has ordered Jet Airways, amidst pending insolvency proceedings before the National Company Law Tribunal ( NCLT ), to pay costs amounting to Rs 25,000 to the Prime Minister’s Relief Fund.
The two member bench of the tribunal comprising Vikas Aswathy ( Judicial member ) and Pathmavathy ( Accountant member ) remitted the issue back to the AO for a denovo consideration of the various issues.
The Bangalore bench of the Income Tax Appellate Authority ( ITAT ) observed that Banking company as per Section 2(c) of Banking regulations Act, 1949, would be eligible for claim of deduction under Section 80P(2)(d) of Income Tax Act, 1961
The two member bench of the tribunal comprising Madumitha Roy ( Judicial member ) and Chandra Poojari ( Accountant member ) affirmed that the interest income acquired by a cooperative society from investments held with a cooperative bank lacking a license under section 22 of the Banking Regulation Act 1949 was excluded from the definition of “Banking Company” as per section 2(c) of the Banking Regulations Act, 1949.
The Hyderabad bench of the Income Tax Appellate Tribunal ( ITAT ) has permitted a deduction for the investment made in the construction of a mosque utilized for religious purposes within a residential property under Section 54F of the Income Tax Act, 1961
The two member bench of the tribunal comprising R.K.Panda ( Vice president ) and Laliet Kumar ( Judicial member ) scrutinized the provisions of Section 54F, of the Income Tax Act, 1961, which provide for deductions. A straightforward interpretation of the section indicates that there is no provision for a proportional deduction, especially when a residence cannot be established within a Mosque.
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that no addition shall be made under Section 69A of the Income Tax Act, 1961, for cash deposition into a Non-Resident Ordinary ( NRO ) bank account during travel to India.
The two member bench of the tribunal comprising Saktiji Dey ( Vice President ) and Dr.B.R.R Kumar ( Accountant member ) concluded that no addition under Section 69A of the Income Tax Act, 1961, was warranted. In the result, the appeal of the assessee was allowed.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) observed that Account of inadvertent mistake or ignorance included in income any amount is exempt from Income Tax Act
The two member bench of the tribunal comprising Amarjith Singh ( Accountant member ) and Aby T. Varkey ( Judicial member ) observed that the assessee that if taxation was not permitted under the law, tax cannot be imposed using the Doctrine of Estoppel. Article 265 of the Constitution of India states that no tax shall be levied or collected except by authority of law. Our position is further supported by the judgment of the Supreme Court in the case of CIT Vs. Shelly Products, where the Court stated that if an assessee unintentionally included in their income any amount exempt from income tax or not considered income under the law, they can bring this to the attention of the tax authorities. If satisfied, the authorities may provide relief and refund any excess taxes paid
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) observed that Transaction done through Bombay stock exchange on Securities Transaction Tax ( STT ) cannot be considered as sham or bogus transaction
The two member bench of the tribunal comprising Astha Chandra ( Judicial member ) and N.K.Billaya ( Accountant member ) observed that the revenue’s attempt to provide compelling evidence to prove that the taxpayer benefited from declaring the alleged fraudulent loss fell significantly short. On the contrary, the available evidence indicated that the transaction had been conducted through the Bombay Stock Exchange, with Securities Transaction Tax ( STT ) duly paid, indicating its legitimacy and dispelling any notion of it being a sham or bogus transaction. Taking into account all the facts presented, we instructed the Assessing Officer to acknowledge the loss of Rs. 1,41,29,989/-.
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